Policy Analysis: Examining Gwinnett’s Affordability Gap

Policy Analysis: Examining Gwinnett’s Affordability Gap

Last week, the National Low Income Housing Coalition (NLIHC) released its annual report “The Gap – A Shortage of Affordable Homes” which measures the availability of rental housing affordable to extremely low income (ELI) households and other income groups. This year’s report found that while U.S. household incomes increased overall for the first time since the recession, the poorest 10% of households have seen incomes that remain 6% lower than they were in 2006.
Affordable Rental Shortage
NLIHC found that a total of 11.4 million ELI renter households in the U.S., accounting for 26% of all renter households and 10% of all households. However, there is a shortfall of 7.4 million affordable and available rental homes to house ELI renters. Stated differently, there are only 35 affordable and available units for every 100 ELI renter households in the United States.

The state of Georgia ranks 22nd among all states, offering 38 affordable units per 100 ELI renter households: only three more than the national average. While the state of Georgia offers more units per 100 ELI renters, a shortfall of 238,606 affordable and available ELI units still exists.

In 2015, the Urban Institute utilized a compilation of data from the 2011-2013 American Community Survey and U.S. Department of Housing and Urban Development (HUD) to determine what the ELI rental shortage looked like on a county-by-county basis. Together with Cobb County, Gwinnett was identified as having the fewest affordable and available ELI rental options at only 9 units per 100 ELI renters.

Results from the NLIHC report show that ELI renters not only face the largest shortfall of affordable and available rental units, but they also face more severe housing cost burden than any other income group.
Housing Cost Burden
Based on the data in the NLIHC and Urban Institute reports, there is no question that ELI renter households are facing an affordable housing crisis on both the national and local levels. The question then becomes, if there aren’t enough affordable housing units for these households, then how or where do they live? Unfortunately, the answer is frequently that they become trapped in living situations that leave them severely cost burdened and without sufficient household income to afford the basic necessities of life.

A household is classified as cost burdened when more than 30% of its gross monthly income goes towards housing costs (rent/mortgage, utilities, etc.). A household is classified as severely cost burdened when more than 50% of their income is spent on housing costs. NLIHC found that 71% of all ELI renter households are classified as severely cost burdened. In 2016, the Joint Center for Housing Studies of Harvard University found that severely cost-burdened renters spend 60% less of their total income on food and 41% less on healthcare than similar households who are not cost-burdened , creating additional hardships that can keep families trapped in cycles of poverty.

On average, the most that an unassisted four-person ELI household can afford to pay in rent without experiencing any cost burden is $507 per month. In 2015, the median rent of an apartment in the U.S. was $1,381 per month. That’s a cost disparity of $874 in terms of affordability.

Looking at this issue locally, the fair market rate in Gwinnett County for a two bedroom apartment is $949 per month, which is a cost disparity of $442 from the national average. Additionally, the 2016 NLIHC Out of Reach report documents that an annual household income of $37,960 is required for rent at that price point to be considered affordable . That income requirement is $13,650 higher than what HUD has determined to be the limit for an ELI household in Gwinnett County.

The issue of homelessness is directly tied to the availability and affordability of rental units. Without these units, families are forced into housing situations where they may be one expense away from living on the street. As Family Promise of Gwinnett County stabilizes women and children who are homeless through the Salt Light Center and graduates families from our Homeless Recovery Program, it is imperative that affordable units be identified for these families to transition into. Ensuring that the existing units are preserved and that additional units are made available moving forward is a key part of our long-term strategy.